The current system is not a free market; it is a set of government rigged rules that ensure that the insurance and pharmaceutical industries prosper, and that tens of millions of people go without access to care - Dean Baker (DOB 7/13/1958) co-director of the Center for Economic and Policy Research (CEPR) and author of "The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer".
Following is an excerpt from the 6/14/2007 broadcast of The Thom Hartmann Show. Thom Hartman interviews John Edwards regarding his proposed health care plan (edited for brevity and clarity)...
Thom Hartmann: Specifically, what are the things you're suggesting we do? (to bring down the costs associated with health care.)
John Edwards: Well, in the case of insurance companies, we want to create competition that doesn't exist today, between the insurance companies that are in these "health markets" that I'm going to set up with my health care plan. ... Everybody will be covered under either a private or public plan. People can choose the government plan if they want to. That creates a competition that doesn't exist today. Secondly, because insurance companies are spending 30-40 percent of every dollar on administrative costs and profits, we mandate a minimum of 85 percent of each dollar has to go towards patient care.
Thom Hartmann: That seems like an incredibly important thing. I was staggered last fall when the wall street journal revealed that William McGuire, the CEO of United Health Group - the second largest health insurance company in the United States, took home 1.6 billion (see update below) ... His company's stock price tripled from January 2003 to January 2006. Net income in 2005 of 3.3 billion - and this is a company that is basically just moving money - moving paper around.
John Edwards: That's exactly right. It's terrible that we have 45 million people without coverage - that's a moral issue - but on top of that the costs are just staggering. We desperately need a president who will take these insurance companies on. They don't need to make that kind of money. ... You can count on the fact that there's going to be millions of dollars spent on television ads fighting what we're trying to do. What you should ask yourself, when you see one of these ads, is "who's paying for it?". It's either a big drug company, or a big insurance company. It's the people who are charging you so much money that you can't continue to pay for your health care.
Thom Hartmann: Senator Edwards, tell us a little more about the Medicare Plus part of this plan, please.
John Edwards: There are a lot of people who believe that we should go from the system we have now to a single payer system. An entirely government run health care system. There's a lot to be said for single payer - it's administrative costs are much lower, they're more efficient, and - certainly in some places - the care is better... but we live in a country where people are used to having choices, and my concern was that jump was to much, to fast. We need to do something big, something bold, cover everybody, real universality ... but we wanted people to have a choice between a private or a government plan. The reason for me setting it up that way is because I think people will choose to go to the government plan. The net result will be to drive the system to a single payer system.
My Commentary: Obviously insurance companies will, by and large, be unable to compete, and will be driven out of business. Fantastic. There is absolutely no reason why the American people should continue to tolerate these leeches which drain away 30 to 40 percent of every health care dollar when the government can do the same job for 3-5 percent.
Seeing as, according to Mother Jones Magazine, 76 percent of Americans agree that access to health care should be a right and should be provided equally to everyone (according to a 2004 survey), the only question is will our elected officials give us what we want, or will they bow to the wishes of their corporate masters?
Meidcare for all would save an estimated $300 billion dollars. Even though millions of us have no health coverage at all, we spend almost twice as much as the other countries that do a better job of covering everyone. We waste hundreds of billions on insurance companies which do not provide any health care. In fact, one third of that money is wasted on company salaries, stock holder profits, lobbying and marketing. The only way to pay for all of us is to remove the useless waste and profits of the insurance companies.
Update, 7/23/2007: Regarding the 1.6 billion United Health Group CEO William McGuire "took home" - Mr. McGuire's stock options are currently frozen due to ongoing litigation. It seems that the Public Employees' Retirement System of Ohio (PERS) and the State Teachers' Retirement System of Ohio (STRS), who own a combined 5.6 million in UHG common stock, are claiming that the value of their stock declined due to "the options backdating scandal in which the UHG board cavalierly abdicated its oversight responsibilities and improperly allowed McGuire to set his own compensation". (Attorney General Marc Dann questions UnitedHealth Group review panel. 2/7/2007)
Further Reading
[1] Facts about Universal Health Care and Single Payer Health Care for All.org.
[2] Sicko Factual Backup From MichaelMoore.com.
[3] Sicko Proves our Health Care Approach is Working by Janet Bagnall, Montreal Gazette. 7/15/2007
[4] Fixing Health Care: Not Government vs. Market by Dean Baker, Truthout.org. 7/10/2007.
[5] United Health sued for racketeering posted by nyceve, The Daily Kos. 2/15/2007.
[6] Edwards Details His Health Care Proposal by John M. Broder, The New York Times. 2/6/2007.
[7] Health Care Administrative Costs: Canada vs. USA From Healthfacts. 10/2003.
[8] The Case For Single Payer, Universal Health Care For The United States (Universal Health Care Myths Debunked) by John R. Battista, M.D. and Justine McCabe, Ph.D. 6/4/1999.
I like your post but I think you might be missing one large aspect behind the rise in insurance rates. One of the biggest problems we have is that helth costs have risen dramatically over the years. A primary reason for this is the actions of litigation attorneys, like Edwards, who have made it much more expensive to provide health care. Lawyers have been largely responsible for driving the costs up due to the lawsuits they have filed against health care providers. Sure some of them were legitimate but a large majority of them were not. And even if these lawsuits lost in court it still costs money to defend them.
ReplyDeleteI agree that the insurance industry needs some sort of kick in the pants but I believe it is needed for other reasons. i don't want to see socialized medicine in the US. That's what would happen if these insurance companies don't get a grip on their finances. They will eventually price themselves out of an industry.
Anyways that's my .02!
Jorge G. Ginzo said... I like your post but I think you might be missing one large aspect behind the rise in insurance rates. ... A primary reason for this is the actions of litigation attorneys, like Edwards...
ReplyDeleteNo, I didn't miss that aspect. I didn't address it because I don't believe that it has anything to do with the rise in health care costs. In fact, it is nothing more than Republican propaganda -- similar to the canard of the "death tax" being responsible for the loss of (even one) family farm.
The GOP would like us to believe "frivolous" lawsuits are one of the primary forces driving up the cost of healthcare, but -- as the following article excerpt points out -- that simply isn't true (notice the use of the word "phony" in he article title):
Malpractice Makes Perfect: How the GOP milks a phony doctors' insurance crisis. (excerpt) ...the respected General Accounting Office (GAO) has recently concluded that there's little evidence to back the doctors' (VA doctors who went on strike to protest the high cost of malpractice insurance) main claim, which is that lawsuits are forcing many of them to abandon the practice of medicine or to avoid high-risk procedures. And while there's no doubt that malpractice insurance is getting more expensive across the board -- about 30 to 40 percent, on average, during the last three years -- this increase is largely due to the ailing stock market and poor business practices in a virtually unregulated industry. As a result, there's no reason to think that capping jury awards would bring premiums down, a fact the insurance industry itself acknowledges.
The article goes on to explain that Republican claims that litigation Attorneys are to blame for upward spiraling heathcare costs are by-and-large FALSE.
Although the malpractice strikes look like a natural outgrowth of physician frustration, they are, in fact, the product of a sophisticated lobbying campaign coordinated by Republican operatives and underwritten by business groups with little interest in the practice of medicine. ... With health-care costs skyrocketing on its watch, the GOP is eager to shift blame onto the Democrats... By linking rising health-care costs to frivolous medical lawsuits, Republicans can use doctors as a cudgel against trial lawyers, the Democratic Party's second-largest funding base and one which could be paralyzed by lawsuit caps.
The real reason for the jump in malpractice insurance rates...
Studies have repeatedly shown that only 5 percent of the nation's doctors are responsible for more than half of all malpractice payouts. Yet those lawsuit-magnet practitioners generally pay the same insurance rates as doctors who've never been sued, the equivalent of giving drunks the same car insurance rates as soccer moms with perfect driving records.
The solution to this problem is NOT to limit the patients' right to sue
Better regulation of health care would likely reduce the number of malpractice lawsuits simply by reducing the number of medical injuries. (From a 2006 article from Washington Monthly by Stephanie Mencimer).
"Healthcare costs are up because docs are worried about getting sued" GWB dissembling in a 7/2002 speech regarding medical malpractice in North Carolina (home state of trial lawyer and Democratic presidential hopeful John Edwards).
My conclusion? Contrary to your claim, John Edwards, and other trial lawyers who represent victims of physician malpractice are not to blame for the increase in health care costs. The insurance industry does not need a "kick in the pants" -- they need to be driven out of business. Which is what Mr. Edwards' proposal will do.
But, hey, even though you got it wrong, I want to thank you -- First of all for taking the time to read my blog, and secondly for bringing up this common misconception -- thus giving me the opportunity to set you (and others who have been mislead by this lie) straight.
BTW, John Edwards isn't proposing socialized medicine -- I don't believe there is a single politician who is. He is proposing a single payer system -- which is something I DO want to see in the US.